Illinois State and Local Tax Updates March 2019

The Illinois Dept. of Revenue has exclusive authority over use tax disputes

March 27, 2019

Multiple municipalities, looking to recover tax revenue paid according to the Use Tax Act, brought an action before the IL Supreme Court. The municipalities disputed the use tax distribution method, which isn’t distributed based on where the sale took place, but rather under percentage distribution guidelines. The court denied the municipalities’ motion to amend their complaint and said that the IL Dept. of Revenue has authority over the municipalities’ use tax issues. (Dkt. No. 122878)


Illinois Senate proposal: Double the IL state gas tax

March 27, 2019

An amendment to Senate Bill 103 would double the motor fuel tax from 19 cents per gallon to 38 cents per gallon. If passed, the gas tax hike would go into effect July 2019 and increase each year according to an inflation-based formula. However, the increase would be capped at 1 cent per year. In addition to the gas tax hike, the amendment also would increase the license plate registration fee from $98 to $148 annually. If passed and signed into law, the gas tax will be the second-highest in the country.


IL Independent Tax Tribunal rules golf club owned by municipality entitled to exemption on use tax

March 20, 2019

The Illinois Independent Tax Tribunal has held that a taxpayer is entitled to a governmental body exemption from use tax on purchases of equipment used to operate a golf club owned by a municipality. The taxpayer contends the purchases are exempt as a purchase by a governmental body. The tax tribunal said that, because the taxpayer was required to purchase property for the club, the contract states that title to the tangible personal property passes to the municipality once the contract is complete, so the taxpayer is entitled to the exemption. (Dkt. No. 17 TT 13)


Illinois announces free tax prep for low-to-moderate income families and seniors

March 20, 2019

The Illinois Dept. of Revenue has announced free tax preparation assistance for low-to-moderate-income families and senior citizens through several trusted programs across Illinois. For example, the IRS Volunteer Income Tax Assistance and the Tax Counseling for the Elderly programs offer free tax help for individuals making $55,000 or less, persons with disabilities, limited-English-speaking taxpayers, and individuals age 60 or older.

Learn more here:


Illinois Dept. of Revenue issues ruling on securities dealer

March 13, 2019

The Illinois Dept. of Revenue (IDOR) held that a taxpayer, as a securities dealer, must source income earned from intangible personal property to IL even if the income is exempt for federal tax purposes. The taxpayer is a limited partnership that provides senior-secured loans to companies and earns interest through the loans. The taxpayer requested a ruling on whether it’s considered a dealer for IL tax purposes. The IDOR noted that intangible personal property is included in the IL sales factor if the taxpayer is considered a dealer. (IL PLR No. IT 18-0003)


Illinois issues information regarding sales of previously leased vehicles

March 13, 2019

The Illinois Dept. of Revenue has issued an informational bulletin regarding the sales of previously leased vehicles, watercraft, or aircraft. The bulletin notes that, effective 1/4/19, the transactions may be electronically bulk filed, monthly, using Form ST-556-D (Nontaxable Sales for Resale of Previously Rented or Leased Vehicles). The form must be filed by a taxpayer who leases leasing items that must be titled by an IL state agency, if, at the end of the lease, the items are sold to a retailer for resale.

Read the bulletin here:


Basic steps for preventing identity theft and tax fraud

March 6, 2019

The Illinois Dept. of Revenue has issued a statement about its continuing efforts to prevent identity theft and tax refund fraud. The statement reminds taxpayers to follow these basic guidelines: Use software with firewall and antivirus protection; be aware of phishing emails and phone scams; and don’t leave personal information lying around. If taxpayers receive an identity verification letter, they should authenticate their information through MyTax Illinois, the state’s free online account management program.

Read more here:


Taxpayer fails to provide convincing evidence of charitable use of property

March 6, 2019

The Illinois Appellate Court, 1st Division, held that a taxpayer didn’t provide convincing evidence that its property was used exclusively for charitable use. Consequently, the hospice care center is not entitled to a charitable property tax exemption. The taxpayer had previously secured a property tax exemption for its palliative care center. However, the taxpayer subsequently built an inpatient hospice center pavilion on the property. It was denied a property tax exemption because the property wasn’t used exclusively for charitable use. (Dkt. No. 1-18-1321)

© 2019

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